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Investigations

New York Construction Company Agrees To Forfeit $1.8 Million as Part of Deferred Prosecution Agreement

On November 1, 2018, D&B Engineers and Architects, P.C. (D&B) of Woodbury, New York, entered into a deferred prosecution agreement (DPA) with the Manhattan District Attorney’s Office (DANY) requiring a forfeiture of $1.8 million and the acceptance of an integrity monitor.

On April 18, 2018, DANY announced indictments of D&B; Henry Chluspa, former D&B president; and Ifeany “Manny” Madu, a former manager at the New York City (NYC) Department of Environmental Protection, among others. The indictments followed a wide-scale corruption and fraud investigation impacting numerous projects, including the Kosciuszko Bridge Reconstruction Project funded by the Federal Highway Administration and various subway projects funded by the Federal Transit Administration through the New York State (NYS) Metropolitan Transportation Authority (MTA).

D&B and Chluspa were charged with multiple counts of bribery and corruption in schemes that involved Disadvantaged, Women-owned, and Minority Business Enterprises (DBE, WBE, MBE) and illegal campaign contributions by construction companies and high-level executives. In addition, between 2007 and 2016, Madu allegedly leaked confidential information about city contracts to certain construction management companies and their executive officers during the procurement and bidding process, giving them a competitive edge over other bidders. D&B acknowledged that in exchange for the confidential information, Chluspa provided Madu with gifts, hotel stays, and theater tickets, and caused D&B to award approximately $1.8 million in subcontracts to various MBEs and WBEs secretly controlled by Madu.

DOT-OIG is conducting this investigation with DANY’s Construction Fraud Task Force, whose members include the NYC Department of Investigation, Port Authority of New York and New Jersey OIG, NYS-MTA-OIG, NYS-OIG, Dormitory Authority of the State of New York, NYS Insurance Fund, and School Construction Authority.